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Deputy Prime Minister

Volume 451: debated on Wednesday 1 November 2006

The Deputy Prime Minister was asked—

Comprehensive Spending Review

1. What work he has undertaken on Government policy with regard to the 2007 comprehensive spending review. (98410)

This is the fifth spending review undertaken by the Government and the second comprehensive one. Since 1997, 2.4 million jobs have been created and the UK economy is enjoying the longest period of sustained economic growth for 200 years, which the International Monetary Fund says is a remarkable and enviable record. The present comprehensive spending review is based on an assessment of the long-term challenges facing the UK in the decade from 2007. It will enable us to sustain the momentum of improvements in public services and release the resources needed to meet the challenges of the decade ahead. I have regular discussions with my right hon. Friends the Chancellor and the Prime Minister, Cabinet colleagues and others about how to meet the changes.

How does the Deputy Prime Minister think that the next comprehensive spending review can avoid a repeat of the prison places crisis and the tax credit fiasco?

The spending reviews of the past 10 years show the most enviable economic record, as I have just said, and I can assure the hon. Gentleman that it is our intention to maintain that. The IMF has endorsed that policy, which has not always been the case with Labour Governments or even Tory Administrations. To that extent, it is a bit much for the hon. Gentleman to talk about what he might do about public expenditure—[Interruption.] The implication is clear—what they would do rather than how we deal with public expenditure. Ours is a successful record, which we will continue.

The interim report of the comprehensive spending review in July stated that pay settlements across the public sector should be based on the Government’s inflation target of 2 per cent. Does that target apply to public quangos and, if so, will the Deputy Prime Minister explain how, in Northern Ireland, the Police Ombudsman and the chief executive of the Council for the Curriculum, Examinations and Assessment and many other public bodies could receive pay increases of nearly 10 times that target?

The comprehensive spending review applies to all public sector payments. I am not up to speed on what exactly has happened in Northern Ireland, but I can assure the hon. Gentleman that the review will apply to all.

Given the demanding level of future housing that the Deputy Prime Minister has willed on the south-east of England, in the course of his discussions on the comprehensive spending review, what representations has he made to the Chancellor to increase the woefully lacking infrastructure in the south-east?

When the Chancellor makes his statement, he will make clear how much of the resources will be available for infrastructure expenditure. But let me be absolutely clear: houses are needed in the south-east, as people in the region make clear, and we shall provide the necessary infrastructure.

Will the Deputy Prime Minister tell us how much money will be set aside in the comprehensive spending review to fund his own new Department? Does he think it right that while 20,000 jobs are being lost from the NHS the Government are having to spend millions setting up a new office for a Minister who has been stripped of all his departmental responsibilities?

As usual, the right hon. Gentleman is not up to speed with the facts. His hon. Friend the Member for South Cambridgeshire (Mr. Lansley) said that 20,000 jobs had been lost in the NHS, but it was made clear by the Secretary of State for Health and, indeed, the Prime Minister not just that the figure is only 900 but that it should be seen against the increase of more than 100,000 jobs in the health service, so the figure was just untrue and I hope that the right hon. Gentleman will take this opportunity to withdraw that obvious untruth.

Post Office

I have discussed this important issue with Cabinet colleagues and some postmasters, who lobbied all Members at Parliament on 18 October. The House recognises the important contribution that post offices make to the life of many urban and rural communities, and they will continue play that role in the future. Post offices need to adapt to change, as they are doing, and to offer new services. To support that, the Government have already invested more than £2 billion, and in the coming weeks, once the consultations are concluded, we shall bring forward our strategy.

Under this Government, thousands of post offices have closed, causing real hardship to the elderly, the most vulnerable in our society, people on low incomes and the disabled. Did the Deputy Prime Minister really come into politics to make the daily lives of those vulnerable groups in our society more difficult?

It is a matter of fact that the Post Office has declined considerably over a long period and thousands of post offices have closed, as the House knows from our many debates on the subject over the past 10 or 15 years. The hon. Gentleman should consider the fact that the Government have invested more than £2 billion in modernising the Post Office, whereas the Conservative Government gave it nothing. We have given almost £800 million to develop rural and urban post offices. We are consulting on the issue, we are well aware of the concerns and we will make a statement to the House. The hon. Gentleman should recognise that about 99 per cent. of people live within one mile of a post office.

Will the Deputy Prime Minister use his position as chair of the interdepartmental group on post offices to ensure that his different Departments know that they should give work to the Post Office instead of taking it away? Is not that the real problem—that while we are putting in subsidies, different Departments are not joined up in supporting the Post Office?

I recognise my hon. Friend’s point, but I have to say that many people’s choice has been—[Interruption.] Well, they have a choice whether to take their money to a particular account or leave it with the Post Office card account, and many people have decided to change, which Departments have to recognise. In reality, it is about the use of public resources, but I can assure my hon. Friend that the committee is actively debating how to secure a proper balance between technological change, available resources and customer choice.

Does not the Deputy Prime Minister realise that unless Government Departments give work to the Post Office, people will not be able to use post offices? The most important factor is the continuation of the Post Office card account after 2010. The Government must state soon that there will be a Government-supported successor to that account and make it easy for people to transfer—we do not want all the bullying and badgering to persuade people to go to the banks that happened when pension books were taken away. We want a Government-supported successor and an easy means for people to transfer from the Post Office card account to that successor.

I recognise the hon. Gentleman’s point and I can assure him that these issues are actively being debated in the committees. A statement will be made to the House shortly, so all those questions can be properly answered.

Does not my right hon. Friend accept that what we really need is an early statement? What sub-postmasters and mistresses require more than anything is the security of knowing what is being planned for the network. Will my right hon. Friend include in the statement clear guidance on how local communities can play a part in providing greater support for the Post Office, including the role of social enterprise?

Again, I find myself in agreement with much of what my hon. Friend says. The postmasters who came here two weeks ago made it clear that the present system is unsustainable. We are trying to find a proper balance, as I said, and a statement will be made soon.

This is a classic example of the Government’s policy not being joined up. The Prime Minister says that he wants to keep post offices open, yet the Department for Work and Pensions has been bullying people to move their benefit claims from post offices to banks. People no longer know whether the Post Office card account will be maintained. Furthermore, the Minister for the Cabinet Office, who is in her place next to the Deputy Prime Minister, talks about social exclusion, when the sub-post offices most likely to be closed are in the most rural areas. Two sub-post offices in my constituency at Bolingey and Portloe have been closed and the buildings sold because a profit cannot be sustained. In those areas, however, one in four people do not have access to a car and it is pensioners, disabled people and those on benefits, particularly young mothers, who have the greatest need for a post office.

The reality is, as I have already pointed out, that 99 per cent. of people live within a mile of a post office. It is true that the number of post offices has declined, but the Government have put in nearly £800 million to sustain the existing service. If the Liberal solution is to privatise the Post Office, I suggest that that is made clear to the Post Office, but I am not sure that it will view that as a happy solution.

I am pleased that my right hon. Friend recognises the important role that post offices, whether urban or rural, play in the community, but does he acknowledge that one of the problems has been Government Departments’ strong-arm tactics to get people to give up their Post Office card accounts? We also need a reversal of the BBC decision not to allow the Post Office to supply TV licences. I understand that the DVLA is reviewing its position on whether post offices should be available for car tax.

The Prime Minister made it clear two weeks ago that there has to be a balance in financing the BBC and the Post Office. As the Secretary of State for Trade and Industry said, those matters are being given serious thought. We hope to make a statement to the House when the questions can be answered.

The Trade and Industry Committee report, which was published last week, found a lack of joined-up thinking between Departments. It is seriously concerned about the lack of urgency in the remit of the Cabinet committee on the Post Office that the Deputy Prime Minister chairs. If he hopes to leave our Post Office network a better legacy than the mess that he left in regional government and the strategic transport plan, should not the expected Government statement include a review of their decision to scrap Post Office card accounts?

As has been made clear in exchanges between the Prime Minister and the Leader of the Opposition, and by the Secretary of State for Trade and Industry, the Government are considering all such matters, including the Post Office card account. We hope to make a statement to the House shortly, once the conclusions have been finalised.

Homelessness

The House will recall our inheritance in 1997, against which we should measure our improvements. Under the Conservative Government, homelessness doubled, housing finance halved, 500,000 homes were repossessed, there were record levels of rough sleeping and 1.2 million homes were in negative equity. Our improvements must be measured against that. The Government’s record, which was implemented by the homelessness directorate that was set up in 1999, is: reducing rough sleeping by 73 per cent.; bringing to an end the long-term use of bed and breakfast accommodation for families with children; reducing new homeless cases to the lowest number for more than 20 years, and doubling housing investment. In March 2005, I set out our strategy for building on those achievements in “Sustainable Communities: Settled Homes; Changing Lives”.

Does the Deputy Prime know that Salvation Army research shows that there will be 100,000 rough sleepers on the streets of Britain tonight, too many of whom formerly served in Her Majesty’s armed forces and too many spent time in care? Will he consider spending more time on the streets of rural England and this country generally rather than touring the streets of far east Asia? Perhaps there would then be fewer homeless people on the streets of this country.

That is the sort of silly question I expect from the hon. Gentleman. The House can make its judgment but let me pray in aid our record, including the fact that

“the homelessness directorate’s target setting, supported by financial support and advice to local authorities, has helped to bring about significant alleviation of the worst consequences of homelessness”—

not my views, but those of the Tory Chairman of the Public Accounts Committee, who is hardly a friend of the Government’s.

Does not my right hon. Friend accept that we should build council houses for homeless people who cannot afford even affordable housing?

We are doubling the amount of investment in social housing.

Does the Deputy Prime Minister accept that this morning’s statistics on mortgage lending show that the affordability of housing for ordinary families is at its all-time most difficult?

I do not accept that. I acknowledge that there are difficulties, and that is one of the reasons I provided that the building industry could establish the £60,000 house, giving people a chance to get a foot on the buying ladder. The previous Administration halved the amount of housing investment, and record numbers of people were homeless and sleeping on the streets during their time in office. We have changed that in a remarkable way and we shall continue to build on that.

The most important part of the homelessness strategy is an increase in the supply of affordable rented accommodation. What reassurance can my right hon. Friend give the House today that the welcome increases of recent years will be sustained in future?

As we spelled out in the papers that we produced for the House, we intend to continue with those programmes. When my hon. Friend examines the expenditure in the comprehensive spending review and public expenditure statements, he will realise that we intend to provide the resources to achieve those objectives.

The Government’s policy on finding homes for key workers is clearly failing, and 90,000 public sector homes are still lying empty. What are the Government going to do to help these vital workers to find somewhere to live? Given that we have this huge problem, why is Lord Falconer—who has a mere five homes already—receiving a grace and favour flat? Is it not time for the Government to help the key workers to find homes, rather than helping themselves to homes?

More homes are being provided for key workers than under the previous Conservative Administration. I have already read out the record of that Administration—for which the hon. Gentleman has a responsibility—under whom the amount of housing investment was halved, more people were living in houses with negative equity, and many people were made homeless. We are quite proud of our record on housing, and we are improving on it.

Ministerial Visits

As the House may be aware, during my 10-day visit to the far east, I met a number of senior Asian leaders on behalf of the Prime Minister. These included the Prime Ministers of Japan and South Korea, the Deputy Prime Minister of Malaysia, the Foreign Secretary Ban Ki-Moon—the United Nations Secretary-General designate—State Councillor Tang, who is the co-chairman of the China taskforce set up by my right hon. Friend the Prime Minister, and Premier Wen of China. The House will be aware that State Councillor Tang is also China’s special envoy on North Korea, and I spent three hours with him discussing North Korea and other interests.

The main outcomes of my visit were: to confirm our support for the United Nations resolution and encourage the resumption of the six-party talks; to support and strengthen the UK’s political and economic relationships with these countries; to meet senior members of the new Administration in Japan; to exchange ideas on areas of common interest and concern, including the environment, security and inter-faith issues; and to agree a future programme of work for the UK-China taskforce.

Will my right hon. Friend say a little more about his conversations in China and South Korea about North Korea? Does he feel that China is ready to step up to the plate and take the lead on that matter?

The House will welcome yesterday’s statement that the Chinese Government have successfully persuaded North Korea and America to reconvene at the six-party talks. The right hon. Member for Richmond, Yorks (Mr. Hague) has made the Opposition’s view clear in calling for tougher United Nations sanctions to get North Korea to participate in the talks. However, North Korea has now agreed to do so without the need for that pressure, which we supported. I hope that the discussions that I had in Japan, South Korea and China will help to press home the Government’s position, supported by the Opposition, that we support the United Nations resolution and that the six-party talks should begin. We look forward to that happening.

During the Deputy Prime Minister’s visit, what impression did he get of Chinese attitudes towards the North Korean President Kim Il Sung?

Without disclosing any confidential discussions that I had, which I have conveyed to the Prime Minister, I think that it is public knowledge that the Chinese were not happy with the announcement that was made, of which they had very little notice. The hon. Gentleman must accept, however, that China played a major part in doing what the whole international community wanted—namely, bringing pressure to bear to get North Korea to the table so that the six-party talks could continue. The whole House should welcome that—[Interruption.]

My right hon. Friend will be aware of the proposed major Chinese investment in the borough of Wigan. Did he discuss this matter with representatives of the Chinese Government during his visit? Will he use his best endeavours to ensure that there are no blockages at the UK end to this important investment in Wigan?

My hon. Friend knows that I take every opportunity to press the case for British investment in China and, indeed, for Chinese investment in the United Kingdom. There was a great deal of discussion about how we can improve that. Indeed, the subject is one of the major items for the China taskforce, which I chair with State Councillor Tang on behalf of the two Prime Ministers.

As the Government intend to tax the public to the hilt in their efforts to reduce carbon dioxide emissions, will the Deputy Prime Minister make a commitment to reduce foreign travel to support the green agenda?

If the hon. Lady knew anything about these global problems, which require global solutions, she would know that Members of Parliament have to travel to different countries to negotiate the agreements involved. The Government have a scheme under which all such travel will be taken into account, credited and used as part of the carbon agreements.

Equal Pay

5. What discussions he has held with stakeholders on equal pay across the public sector; and if he will make a statement. (98414)

Hon. Members will be aware that the Office for National Statistics announced last week that the pay gap between men and women is at its lowest recorded level. I am sure that the whole House will welcome that. However, there remains more to do. The Government have issued a clear action plan to respond to the women and work commission. I have chaired meetings with Baroness Prosser and the general secretary of the TUC to discuss how we can continue to narrow the pay gap. I intend to continue to meet interested parties, including the CBI, to discuss how we can continue to narrow the gap further.

I thank my right hon. Friend for that answer. What are the Government doing to help public sector employers to break down the barriers faced by women in the labour market and narrow the pay gap?

It is important to engage employers on the matter. We have started to build up a set of exemplary employers from both the public and private sectors that have good practice initiatives to improve the situation. We are building on an initiative fund, which stands at approximately £500,000 at the moment, to increase the number of senior, quality jobs that are available part time. We are setting up funding for a network of equality representatives and trade union reps to champion equality in the workplace.

Why is the gender pay gap among part-time workers bigger in the public sector than it is in the private sector?

That probably reflects the negotiation techniques that have been used in the past—I suspect that the hon. Gentleman is aware of them. The recent Cadman judgment stated that pay related to years of service had definitely worked against women. The Government are having to take that into account.